Since the land of this case cannot be deemed as farmland self-fluored by the Plaintiff, the disposition that excluded the reduction or exemption of capital gains tax on the transfer of this case is legitimate.

The land of this case cannot be deemed to be self-owned farmland by the plaintiff, and there is no evidence to deem that each of the land of this case was farmland at the time of transfer, and it is difficult to deem that the plaintiff cultivated the land as the representative director of the

Article 69 of the Restriction of Special Taxation Act: Reduction or exemption of transfer income tax for self-farmland

District Court 2018Guhap13037

00

00. Head of tax office

August 22, 2019

September 5, 2019

1. The plaintiff's claim is dismissed.

2. Litigation costs shall be borne by the Plaintiff

Cheong-gu Office

The Defendant’s imposition of KRW 0 (including additional taxes) and KRW 0 (including additional taxes) of the transfer income tax for the year 2015 on the Plaintiff on July 1, 2017 shall be revoked in all.

1. Details of the disposition;

A. The Plaintiff: (a) the amount of 282-4 2,006 m2,006 m2,000 m2,000 m282-5 m2,000 m2,000 m2,000 m2,000 m2,000

The father AA (hereinafter referred to as “the deceased”) owned on December 26, 2013. As the deceased died on March 21, 2014, the Plaintiff was subject to legacy on December 26, 2013 with respect to the land of this case on March 21, 2014. As to the shares of 1,806/2,006 out of the above 282-4 land (the shares of 200/2,006 are inherited by B) on December 26, 2013, the Plaintiff completed each registration of ownership transfer on the ground of inheritance by consultation division on December 26, 2013. Meanwhile, since the above 282-4 land divided one thousand square meters from the above 1,010 square meters, the Plaintiff was referred to as “land of this case” and “land of this case” as “land of this case.

B. On February 13, 2015, the Plaintiff sold the instant land in KRW 515,00,000 toCC. On June 30, 2015, the Plaintiff completed the registration of ownership transfer on the said land toCC.

C. On June 17, 2016, the Plaintiff and B sold the instant land 2 to DD in KRW 610,000,000, and completed the registration of ownership transfer with D on July 29, 2016.

D. The Plaintiff filed a transfer income tax on the instant land with the Defendant on July 14, 2015, and on September 21, 2016, on September 21, 2016, by applying the reduction or exemption of transfer income tax on self-arable land for at least eight years under Article 69(1) of the former Restriction of Special Taxation Act (amended by Act No. 14390, Dec. 20, 2016; hereinafter the same).

E. After conducting an investigation of capital gains tax on the transfer of each of the instant lands, the Defendant, on July 1, 2017, excluded the reduction or exemption of capital gains tax on self-owned farmland on the ground that each of the instant lands was not farmland at the time of the transfer date, and notified the Plaintiff of the correction and notification of capital gains tax of KRW 173,901,80 (including additional tax), and capital gains tax of KRW 118,220,000 (including additional tax) reverted to the year 2015 (hereinafter “the Defendant”).

The disposition of this case is referred to as the "disposition".

F. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on September 29, 2017, but the Tax Tribunal dismissed the Plaintiff’s appeal on December 28, 2017.

[Ground for recognition] Unsatisfy, Gap evidence Nos. 1 to 4, Eul evidence Nos. 1 to 4

statement of each chapter, including number, hereinafter the same shall apply) and the purport of the whole pleading

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) From 1973 to 1973, the Deceased left a farmer’s house in each of the instant land. Since the Deceased’s death on December 26, 2013, the Plaintiff continued to leave the farmer’s house on each of the instant land until the date of transfer. Therefore, each of the instant land was farmland at the time of transfer, and the Plaintiff satisfied the requirements for self-employed period of not less than eight years pursuant to Article 66(11) and (12) of the Enforcement Decree of the Restriction of Special Taxation Act.

2) Even if each of the instant lands was not used as farmland at the time of transfer, it was a temporary absence that the Plaintiff was able to form a farmer at any time in the above land as farmland entered in the public register. In addition, in the event that the farmland inherited is transferred within 3 years pursuant to Article 66(12) of the Enforcement Decree of the Restriction of Special Taxation Act, whether the inheritance land, such as each of the instant lands, is in a temporary absence, should be determined by relaxing the period of cultivation of the decedent, in light of the purport that the period of cultivation

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) The issues of the instant case and criteria for determining farmland at the time of transfer

A) According to the relevant statutes such as Article 69(1) of the former Restriction of Special Taxation Act, Article 66(4) and (5) of the Enforcement Decree of the Restriction of Special Taxation Act, in order to reduce capital gains tax on transferred land as one’s own farmland, the pertinent land must be cultivated directly for at least eight years and the relevant land shall be farmland as of the date of transfer. Meanwhile, Article 66(11)1 and Article 66(12) of the Enforcement Decree of the Restriction of Special Taxation Act provides that, in cases where a successor has continuously cultivated and inherited farmland residing in a location of the farmland for at least one year or where the inherited farmland is transferred by not later than three years from the date of inheritance, the cultivation period of the decedent shall

In this case, the deceased did not dispute the fact that he resided in the location of each land of this case for not less than 8 years, and the fact that the plaintiff transferred each land of this case before 3 years elapsed from the date he inherited each of the land of this case is identical to the circumstances of the above disposition. As such, it is not a matter of whether the land of this case is farmland as of the date of transfer.

B) Article 27(1) of the Enforcement Rule of the Restriction of Special Taxation Act provides that “The farmland subject to the reduction and exemption provisions of the transfer income tax shall be the land actually used for cultivation regardless of its land category on the cadastral record as a dry field.” Even if the land category on the public record is farmland, the land not actually cultivated as of the date of transfer shall not be deemed farmland as of the date of transfer, unless it is determined by the landowner’s own or by another person, or it is in a temporary state of absence or absence (see, e.g., Supreme Court Decisions 91Nu7422, Nov. 12, 1991). Meanwhile, the burden of proving the fact that the transferred land while residing in the location of the farmland and located in the location of the farmland for eight years or more is against a taxpayer who asserts the reduction and exemption of the transfer income tax (see, e.g., Supreme Court Decisions 94Nu96, Oct. 21, 194; 202Du7074, Nov. 22, 2002).

2) Whether each of the instant lands was farmland at the time of transfer

In full view of the following facts or circumstances, which can be acknowledged by adding the whole purport of pleadings to the entries or videos in the evidence Nos. 2 through 14, the Plaintiff is difficult to deem that each of the instant lands was farmland at the time of transfer due to the Plaintiff’s actual use of the instant land for farming from the time of inheritance to the time of transfer.

A) The Plaintiff had a reasonable income from the 2013th anniversary of the date of inheritance as the representative of the JJ Co., Ltd. operating the wholesale business of electric and electronic devices from the date of inheritance to the date of each of the instant land transfer. As such, the Plaintiff had another occupation or income irrelevant to the farming company, but there was no specific assertion as to how to cultivate each of the instant land while doing that work.

B) According to each of the images of the instant images, including the satellite photographs of each of the instant land or the interview pictures recorded on the portal site, the following facts or circumstances can be revealed. Comprehensively taking account of such facts and circumstances, each of the instant land appears to have been abandoned at the time of transfer (the instant land 1 was around June 2015, and around July 2016, the instant land 2).

1. Each of the instant lands is immediately abutting on the land, and the 2010 satellite photographs shows that the pattern of days, which is the date of being discovered in the field generally cultivated as seen in the dry field surrounding the said land, is apparent. However, satellite photographs in 2011 do not appear in the form of a dayless pattern, and do not seem to have been left unreshed in part as a yellow light, and do not appear to have been abandoned differently from before.

2. Examining the photographs of each of the instant lands taken around August 2013, a large number of grasss in the land cannot be confirmed as if yellow soil was exposed to the place without grassing. It does not seem that crops are cultivated in a large state of disturbance even in the photographs taken around November 2014 (Provided, That the Defendant’s report on investigation states that the land in this case is confirmed as farmland on November 2014, but it is difficult to understand the actual image of the pictures, and the Defendant cannot be seen as different solely because it stated that some of the pictures were stored in a photo, and the description alone is difficult to view it as being written. With the satellite photo in 2014, each of the instant land in this case only is yellow belts, and it is difficult to find any trace of crops cultivation.

3. In light of the satellite photograph in 2015, the land in this case appears to be a yellow-fluorial site. The part adjoining the land in this case is overall fluorial light, and part of the upper part of the land in this case is yellow-fluoring (On the other hand, there are several buildings on the upper part of the land in this case). In light of the photograph taken around September 2015, the waste that appears to have been abandoned in the adjacent building on the land in this case 2, is left abandoned, and the part on which the above fluorial light is dried.

4. Meanwhile, the photograph taken around October 2016, which was after the transfer of the instant two land, appears to have been planted by the drilling, etc. However, according to the statement, etc. of the transferee at the time of the investigation by the Defendant following the transfer, the time when the photograph was taken by the transferee would be immediately after the purchase by the transferee.

C) On April 2017, when the Defendant’s employee conducted an investigation into each of the instant lands, the instant land was used as a site for the warehouse building. Some seedlings were planted on the instant land. Moreover, the lessee stated that the instant land was not farmland but was in the state of de facto being abandoned from March 2016 to the date of transfer, and that this NN, who had worked from November 201, 2012 in the vicinity of each of the instant land, was in the form of miscellaneous land where the overall atmosphere was left abandoned. Furthermore, on December 29, 2017, the instant land transferred from the date of transfer to December 29, 2017, the instant land category was changed from the former land to the land category.

D) The Plaintiff claims that the Plaintiff cultivated mainly from each of the instant land, namely, waves, bean, drillings, and drillings. The details of transactions (Evidence A No. 11) submitted by the Plaintiff with the payment of expenses related to farming are only 1,50,000 won in total due to the details of transactions, such as expenses for seedlings, tombstones, seed nurserys, and tree residues around April 2014, and there are only 1,500,000 won in total, and it is nothing more than 189,90 won in total with the Plaintiff’s cultivated products, and it is nothing more than 189,90,000 won in terms of the amount of money purchased on March 31, 2014, and 4, K4,000 won in terms of labor cost on April 3, 2014. However, it is insufficient to view that the Plaintiff did not submit the details of sale of each of the instant farmland, other than each of the instant farmland at the time of sale.

E) Meanwhile, each entry in the farmland ledger (No. 9 and 14) and the membership certificate (No. 10) and the self-finding confirmation certificate (No. 8) submitted by the Plaintiff, which are evidence as to the fact that the Plaintiff cultivated each of the instant land, is difficult to believe such entry as follows, or it is insufficient to prove the fact that each of the instant land was used for the actual farming after the date on which the inheritance commences.

1. In the farmland ledger, the land of this case 1 and the land of this case 282-4, which is the land before dividing the instant two land, is written as a self-fluored farmland by no later than May 10, 2015. However, the farmland ledger is not a few cases where the farmland ledger is formally prepared and kept for various tax reduction and exemption for the purpose of farmland management and the efficient implementation of agricultural policies, and it is difficult to deem that the current status of the land is accurately reflected because it is not sufficient for administrative agencies to examine it.

2. In examining the Plaintiff’s certificate of membership, the Plaintiff’s subscription to an agricultural cooperative on June 17, 2014, which was after the deceased’s death, can be known. However, this is merely a member of the cooperative, and it is difficult to prove the fact of cultivation. Rather, it is difficult to prove the fact of cultivation. Rather, the details of the Plaintiff’s sales are confirmed only by each trader of the 00 Agricultural Cooperatives submitted by the Plaintiff, and the details of the Plaintiff’s sales after 2014 are not confirmed.

3.00 The letter of confirmation of self-sufficiency prepared by TT and IS is written to the effect that "the plaintiff has satisfied the fact that he/she has voluntarily filed a suit from the land of this case from the date of inheritance (the date of December 26, 2013) to the date of transfer (the date of June 30, 2015) (the date of June 30, 2015)." However, it is difficult to readily conclude that TTS is aware of the state of cultivation of the land of this case on the ground that TTS is in the position of the president of the village and the head of the village. The contents of the letter of confirmation are nothing more than signing and sealing on the printed part of the same vice

3) Whether each of the instant lands was in a temporary absence or absence

Comprehensively taking account of the facts and circumstances revealed earlier, it is difficult to deem that each of the lands of this case was temporarily in a state of temporary holiday at the time of transfer.

A) Each of the instant lands appears to have not been properly used as farmland from around 2011, which was the transfer of the deceased’s death, and there is no evidence to deem that the instant land was actually cultivated even during a period of four or five years, which is subsequent to the transfer of the land. As such, it is difficult to view that each of the instant lands, which was transferred, was a temporary suspension of land due to being left alone without being used as a long-term cultivation area, and was in a state of temporary suspension of land or miscellaneous land.

B) The Plaintiff asserts, after inheritance, that the Plaintiff actually cultivated each of the instant land and on the other hand, that it was a temporary state of suspension of cultivation, and that it is not consistent in itself with the assertion. In addition, the Plaintiff asserted as above, and there is no specific assertion as to when and when the cultivation in each of the instant land was suspended, and what the reasons for suspension were.

C) The legislative purpose of the self-employed farmland reduction and exemption regulations is to prevent external farmland speculation and reduce the tax burden of self-employed farmers for not less than eight years (see, e.g., Constitutional Court Order 2003HunBa2, Nov. 27, 2003). However, preferential treatment measures for tax reduction and exemption should be avoided as much as possible and its scope should be expanded as possible against the principle of tax equality and as it is a waiver of financial resources of the State or local governments. Therefore, it is not desirable that the scope should be expanded. In particular, if it is necessary to achieve the policy objective, it should be exceptionally permitted within the extremely limited scope (see, e.g., Constitutional Court Order 202Hun-Ba2, Sept. 19, 200; Constitutional Court Order 2003Hun-Ba2, supra). In particular, whether the land was used for cultivating land at the time of transfer is directly related to the above legislative purpose, and in light of the fact that the Plaintiff actually cultivated or did not have any intention to cultivate each of this case after succession.

D) In light of the provisions of Article 66(12) of the Enforcement Decree of the Restriction of Special Taxation Act (hereinafter “instant provisions”), the Plaintiff asserts that each of the instant land existed in a temporary absence (the first Plaintiff asserted that the inherited land would not be farmland at the time of transfer under the aforementioned provisions, and did not make such assertion thereafter). However, barring any special circumstance, the interpretation of tax laws and regulations under the principle of no taxation without law ought to be interpreted as legal text, and in particular, it accords with the principle of no taxation without law to strictly interpret the provisions that clearly stipulate special provisions among the requirements for reduction or exemption (see, e.g., Supreme Court Decision 2008Du11372, Aug. 20, 209). In light of such legal principles, it is difficult to view that each of the instant provisions on farmland was a temporary absence of inheritance, and thus, it is difficult to view that the ownership of the instant land was a temporary absence of inheritance from the date of the predecessor’s transfer of the land to the point of sale of the land within the past three years.

4) Sub-committee

Therefore, each of the instant lands cannot be deemed farmland actually used for cultivation as of the date of transfer, and since it is difficult to deem that there was a temporary suspension of land, it does not meet the requirements for reduction and exemption of self-arable farmland, the instant disposition that excluded the Plaintiff from reduction and exemption of capital gains tax on each of the instant lands is lawful.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.